March 24, 2023

Hornby in line of fire at Wagamama as activist investor calls for review arguing bosses have ‘lost focus’



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Former HBOS boss Andy Hornby has come under pressure after an activist investor raised a rallying cry for a review of the company he now runs.

Hedge fund Oasis Management criticized The Restaurant Group (TRG), owner of the board of Wagamama and Frankie & Benny, arguing that the bosses had “lost focus on long-term value creation”.

Oasis, which owns 6.5 percent of the entertainment business, said in a letter that urgent changes were needed to cope with the group’s dismal share price.

Under fire: Former HBOS boss Andy Hornby (pictured) is back in the spotlight after an activist investor raised a rallying cry for an overhaul at the company he now runs.

In retaliation, TRG, which owns 423 venues across the UK including the Chiquito and Frankie & Benny’s chains, said it had turned down Oasis’ request for a board seat and is calling for a strategic review of the company led by a ” independent bank”.

The Oasis attack means that Hornby, who is the chief executive of the Restaurant Group and who ran Halifax Bank of Scotland when it was brought to its knees in the 2008 financial crisis, is back in the spotlight.

share at TRG they have sunk 66 percent over the past year. Hong Kong-based Oasis said it made it “one of the worst share prices of any UK leisure company”, far behind its rivals.

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The slump was “disproportionately worse than the impact of the challenging industry environment alone would justify,” it said.

It’s been a torrid time for the sector as pubs and restaurants’ recovery from the Covid pandemic has been thwarted by increases in energy bills and inflationary pressure on consumers that have reduced spending on the high street. .

A ‘crisis of confidence’ had led the investor to urge the hospitality business to ‘urgently discuss with its shareholders the need for a significant, immediate and short-term change of government’.

But TRG noted that the Covid pandemic and cost-of-living crisis have “created enormous challenges” for hospitality businesses across the country.

But bosses said “swift and decisive management actions” during the pandemic meant the company had been “successfully guided through an extremely challenging period.”

TRG’s response said that its performance “had been strong compared to the broader UK casual dining sector” and noted that many of its rivals were privately owned.